How to do an auto insurance quotes comparison

Holy cow, car insurance quotes, amiright? To say they’re confusing is a massive understatement. There are just so many numbers. And acronyms. And terms no non-insurance expert should expect to understand. (PIP, anyone? Anyone?) And, while you can get a sense of how much your car insurance would cost — that number is usually prominently displayed right up top — understanding the rest of the quote, like how much protection you get and what you’re still on the hook for, is … well, something else.

But take a deep breath. Comparing car insurance quotes isn’t as tricky as it seems. First, you need to determine how much coverage you need. Next, you’ve got to familiarize yourself with what to expect when looking at quotes. After that, it’s just apples to apples. Let’s break down how to compare auto insurance quotes.

How Car Insurance Works

Part of why car insurance quotes are so confusing is because car insurance itself is confusing. For starters, there are different types of coverage. Some are required by law; some are not. And the specifics vary by state. We’ve got a full explainer on how car insurance works right here. But, since it’s so crucial to understanding your quotes, here’s an overview of the major components of an auto insurance policy — and what they cover.

Liability insurance: Consider this the cornerstone of all car insurance policies, given it’s the type of coverage required by nearly every state. Liability insurance actually falls into two buckets. Bodily Injury (BI) covers the cost of any injuries (or death) that result from an accident you caused, while Property Damage (PD) covers the damage made to another vehicle or piece of property your car crashes into.

Medical expenses or Personal Injury Protection (PIP): These policies primarily cover any injuries incurred by you or your passengers.

Uninsured/underinsured motorist insurance: Covers you if you’re hit by a driver that doesn’t have insurance or has very limited insurance.

Collision coverage: Covers any damage to your car incurred in an accident that was your fault.

Comprehensive coverage: Covers any damage incurred outside of a collision. So think theft, vandalism or falling skies. Collision and comprehensive coverage is sometimes referred to as “optional” car insurance, since it’s not required by the states, but it’s usually good to get some anyway.

Gap insurance: Covers the difference between what your car is currently worth — since that’s the value car insurance companies will go by when processing a claim — and what you still owe on it. Gap insurance is meant to protect you against depreciation, which happens to cars very, very quickly.

How to Do an Auto Insurance Quotes Comparison

Like we said earlier, comparing car insurance quotes gets a lot easier if you establish how much coverage you’re looking for before you shop around. You’ll want all the quotes you pull to have the same coverage types, limits and, of course, deductibles. How else will you know what insurer is, in fact, offering the best price? Here’s a quick rundown of how to figure out what type of policy you need.

Decide how much car insurance you need. State requirements represent the minimum amount of coverage you need to drive … and they’re generally inadequate, even when it comes to the required liability insurance. It’s hard to say for sure how much coverage you specifically need, because it depends on the age, make and model of your car, among other things. However, most insurance experts generally recommend limits of $100,000 in bodily injury coverage per person; $300,0000 in bodily injury coverage per accident and $100,000 in property damage coverage. And, if your car is new and/or expensive, you’ll probably want collision and comprehensive insurance, too.

Choose your deductible. That’s how much money you’ll have to pay before your car insurance kicks in. The higher your deductible, the lower your premiums … but the more you’ll pay out-of-pocket if an accident occurs.

Request quotes. Once you’ve settled on these terms, it’s time to start shopping around! The Insurance Information Institute suggests requesting at least three price quotes before buying insurance.

How to Read a Car Insurance Quote

OK, now it’s time to make sense of what you’re seeing on your computer screen. Online quotes have gotten more streamlined in recent years (cough, cough), but there’s a still chance, at some point in your search, you’ll encounter a trio of numbers that looks more like math than anything else. It would appear like so:

100/300/100

That trifecta is actually breaking down the total dollar amount (in thousands) of your liability coverage. The first number represents your bodily injury coverage per person. The second number represents your bodily injury coverage per accident and the third number represents your property damage coverage.

So, if you were looking at the digits above, you’d essentially be buying a policy with the recommended coverage amounts mentioned earlier: $100,000 per person in bodily injury, $300,000 per accident in bodily injury and $100,000 in property damage.

Beyond that, the additional coverage you requested should be listed on the quote (known in insurance-speak as the “deck” or “declarations page”), along with any deductible associated with that portion of the policy. You might also see a list of any car insurance discounts you can or already have qualified for and all the personal information you inputted, along with the make and model of your car (which is worth a scan, just to make sure everything is accurate).

One note on price: Not all insurers will quote based on what you’ll pay each month. Some might list the annual or even semi-annual cost of a policy. (Why? Who knows? Insurance will never get accused of being easy.) Point is, here, too, you’ll want to be sure you’re comparing apples to apples. (Prices vary widely enough where it’s easy to get confused on the actual price.) That way, you know what insurer is truly offering the best price.

How Much Should my Car Insurance Cost?

That’s also hard to say. Beyond how much coverage you’re looking to buy, the cost of car insurance is affected by driving record, place of residence, type of car, how much you drive and your personal details (age, gender, marital status, etc.) But just so you have a frame of reference for what types of prices to expect, the average annual cost for car insurance was about $900 back in 2014.

Keep in mind, if you have a poor driving record or even poor credit score, your quoted rates will likely come in higher than average. Similarly, expect to pay more if you’re trying to insure an expensive vehicle.

How to Compare Car Insurance Companies

Remember, price is just one piece of the car insurance policy puzzle. You also want to make sure you feel good about the insurer you’re doing business with. Do they have a good track record when it comes to paying out claims? Are they known for their customer service? Are they financially solvent? Fortunately, it’s pretty easy to get answers to these questions. In fact, sometimes, some important signifiers will be included with your auto insurance quote. The big stats to check when vetting an insurance company include:

A.M. Best Ratings: The independent agency rates insurers financial soundness on a grading scale from A++ (superior) to F (under regulatory supervision). You can also see how an insurer is rated by Fitch Ratings, Moody’s and Standard and Poor’s, if you want to make sure the insurer really isn’t at risk of going under.

Better Business Bureau (BBB) Ratings: Consider this a good gauge of customer service. You can see customer review ratings for each company and also read any complaints policyholders filed against them.

It’s also helpful to do a quick Google search for online reviews or to see if there have been any major complaints against an insurer in recent years. And, if the insurer has a designated customer service line, go ahead and give the number a call (or two). That’ll give you some insights into response times. We’ve got more on the finding the best car insurance and best car insurance company for you here.

Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.